Hearing ‘rates on the rise’ in the news has become something to dread but is that really sensible? And is it something we should actively worry about? Since the BOE raised the base rate last month and even in November, lenders have been increasing their rates from the record lows that we have seen over the last few years. In an article posted last month, we discussed what exactly the base rate increase means and why it has been done. Mortgage lenders have followed suit as money becomes more expensive which is a natural reaction and despite the media hype, rates are still standing at a very low place with new mortgage customers securing incredibly low products and fixing them for security.
Nationwide is the latest lender to jump on the bandwagon increasing their rates across the board and across all different loan to values they offer. The following updates to product and rates are listed on their website:
We will see rates on various 2 and 5 year fixed products up to 95% LTV and on several 2 year tracker rates up to 85% LTV increase by between 0.05% and 0.20%. The Society’s 3 year fixed rates will no longer match the 2 year products and as a result will increase by between 0.05% and 0.45%.
First-time buyer products have increased with a five-year fixed rate at 60% LTV available from 1.52%, a two-year fix at 85% LTV rising to 1.54%, and a two-year tracker at 80% LTV now at 1.24%.
For new customers moving home, rates have increased. A 5 year fix at 75% LTV has risen to 1.54%, a 2 year fix at 85% LTV to 1.44%, and a 2 year tracker at 80% LTV to 1.19%. Similarly, several 2 and 5 year remortgage rates have risen with a 2 year fix at 60% LTV increasing to 1.44% and a 5 year fix at 80% LTV to 1.94%. A 3 year fix at 75% LTV has increased by 0.20% to 1.64%.
What do the advisors say about rates?
Louis Mason, content manager at Oportfolio had this to say:
“It seems that mortgage rate rises have become a taboo topic when really it’s not. If you have the right people looking after you. Rate rises were inevitable, but no one really knew exactly when it was going to happen. Unfortunately, we have all been tricked into believing that it’s all doom and gloom and that rates are going to be astronomical but, the changes are minimal. If you are either on a competitive fixed rate or you have the opportunity to speak to an expert mortgage broker such as ourselves, you will get the absolute best rate on the market and fixing your rate means that you won’t be affected by any more rate rises.”
What does Nationwide say?
Nationwide director of mortgages Henry Jordan has said: “We regularly review our mortgage range and these latest changes to our new business and switcher are reflective of the current environment. With swap rates continuing to increase, fixed products have begun to move upwards, and our new ones follow changes made across the mortgage market. We are also increasing our BMR and SMR products in line with the bank rise. We are announcing these now to give borrowers certainty about what their payments will be from 1 February as well as time to consider switching to one of our fixed or tracker products, all of which are priced the same or lower than our equivalent remortgage figures.”
At Oportfolio, we are no strangers to changes in the mortgage world and we know what is important when it comes to rates and choosing the perfect mortgage product for you. If you or someone you know is concerned about rate rises, please give our friendly team a call today on 02088771169.